Oil Plunges, Posting Largest Drop All Year

By Avi Salzman

Nymex-traded crude oil futures slid by $3.75 per barrel today, or 4.1%, to $88.14. It was the commodity’s largest percentage decline since Dec. 11 and largest point drop since May 4. Oil is now at its lowest level since early August and is down about 20% off of its 52-week high of $109.77 per barrel, which it hit in February.

And here’s the strange thing: the government said inventories fell. Domestic stocks dropped by 482,000 barrels last week, according to the Energy Information Administration. Analysts polled by Reuters had expected oil stocks to rise by 1.5 million barrels.

Traders may be more spooked by demand concerns, as Chinese and European factory data has showed more contraction.

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